Don’t implement NSSF Act, unions urge

PUSETU Secretary General Charles Mukhwaya (left) with union chairman Tom Odege address the Press at Knut headquarters in Nairobi, Wednesday.  [PHOTO: JENIPHER WACHIE/STANDARD]

By RAWLINGS OTIENO and IMMACULATE AKELLO

Kenya: Civil servants want the Government to suspend implementation of the new NSSF Act that is set to take effect on June 1.

The Central Organisation of Trade Unions (Cotu) is also opposed to the scheduled implementation of the new National Social Security Fund (NSSF) rates and has already moved to court seeking the orders to stop it.

Besides, the decision has also been arrived at following the rejection of the nomination of a Cotu nominee to join the NSSF board.

“With our representation on this board denied, Cotu has no option but to call on its members not to pay any extra cash to NSSF based on the new NSSF Act,” said Cotu

The Federation of Public Servants Trade Union (Pusetu) warned that they would resist any move by the Government to implement the Act without their input.

In the absence of any upward adjustment to the minimum wage this year, Cotu argues that its workers are constrained to allow for any further deductions.

“We have called on all our members and employers not to effect the new rates until such a time we as social partners sit and agree on the deductions,” said the union.

Cotu said its demand for meaningful reforms at NSSF continue to be ignored.

“In the absence of such reforms and with the expected enhanced contributions from Kenyan workers of six per cent from the worker and a similar amount from the employer, we have no doubt that our funds will continue to be squandered in unviable and non-existent projects as the issue has been previously,” Cotu said in a statement.

Pusetu Secretary General Charles Mukhwaya said all civil servants, including teachers, would oppose the deduction of six per cent of the gross salary towards the pension fund.

He said majority of civil servants were members of superior pension schemes and subjecting them to another fund without proper structures was punitive.

“The deductions could lead to civil servants earning less than a third of the gross income, which is unconstitutional. Article 45 of the NSSF Act 2013 does not give a clear indication of how it will affect the pension scheme,” he said.

The secretary general said the date set for the implementation of the Act was too close. Pusetu wondered whether the Government would remit the contributions to NSSF since Treasury had not factored the deductions in its budgetary allocation in the 2014-2015 financial year.

“We have looked at the budgetary allocation and we can assure our members that Treasury has not allocated such deductions. We must be sure that if our members are going to contribute, then the Government must also do so,” said Pusetu chairman Tom Odege.

He said Sh183 billion would come from civil servants alone annually and they must therefore ensure that the fund was run prudently.

Odege claimed the NSSF Act does not give clear indications on how it will affect workers, considering Kenyan workers are among the most highly taxed people in the world.

“The Kenyan worker is already overburdened by taxes yet his salary and wages have remained the same for years. The law says that a person cannot be taxed beyond one-third of his salary,” said Mr Odege.

Mass action

The union threatened to use all means, including mass action, if the Government does not suspend the new NSSF deductions.

But Mukhwaya urged the Government to give them more time to study the Act before it was implemented.

“Civil servants cannot contribute funds to a board that they are not involved in. The key stakeholders must be consulted before any decision is imposed on them otherwise we will know that they were merely rubberstamping what they had already discussed,” said Mukhwaya.

The union also wants the Government, through the Ministry of Labour, to ensure that the NSSF board is re-constituted.

“NSSF has been charged with many corruption cases since its establishment so we cannot trust it,” he said.